3 Common Reasons Employers are Sued: Terminations

In this series of posts, we’ve covered the major reasons why employers face lawsuits. While you might have the best intentions with your actions, such as letting your employees work through lunch to get home sooner, this raises some employment law red flags. In this post, we’ll explore the right way to terminate an employee. Hiring and firing are a part of running any business, and doing it the right way can prevent Employment Practices Liability lawsuits from arising. Before moving forward with a termination, heed the following advice.

Provide a specific reason.

First, the manager needs to pinpoint the main reason for letting someone go – be it layoff, violation of policy, performance – then the manager, with the help of an HR specialist, needs to ensure that the reason is not discriminatory in anyway, recommends Zip Recruiter.

As we mentioned in our last post, it’s never lawful to fire someone during a leave of absence. If it’s a legitimate and approved reason, such as maternity or medical leave, letting someone go during this time would result in a hefty lawsuit against your bank.

Schedule a termination meeting.

This is the time to explain to the employee why you made the decision to let them go. While it should review the specific reasons they are being terminated, this isn’t the time to rehash every issue or allow the employee to attempt to negotiate staying with the company.

Be sure to have their final pay ready before the meeting. By law, they must be “cashed out” upon termination. Explain to them how their benefits will be payed to them, as well.

Making adjustments with the team.

It might be a burden for the existing employees to absorb the terminated person’s responsibilities. Even if it’s temporary, hold a meeting and provide an honest reason why he or she was let go without divulging too much (this could land you in hot water as well!). The last thing you want is for the rest of your employees to fret and assume their job is on the line. Thank employees for taking on the extra workload and let them know of your plans to hire another person in their place, if applicable.

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Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for financial entities, in addition to providing crime insurance and general business insurance products to a number of firms across the United States. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.